STEADY BROOK — With a history of exploration dating back to the late 1800s, western Newfoundland has long been hailed as a potential hot spot for the petroleum industry.
During a presentation as part of the Western Newfoundland Oil and Gas Symposium Thursday, Larry Hicks, a geologist with the Department of Natural Resources, outlined how far exploration in the region has come since prospector John Silver first drilled for petroleum in Parsons Pond before the turn of the 20th century.
In the roughly 2,500 kilometres of coastline extending from northern Labrador, around the Grand Banks and back up through western Newfoundland, Hicks said there are at least 22 different basins with the potential to be drilled for oil. Looking at the west coast in particular, Hicks said there a three basins currently being explored which include, those in Bay St. George and Deer Lake, as well as the Anticosti Basin which runs from Port au Port to the tip of the Northern Peninsula.
While it’s clear there is plenty of oil in the region, where in some cases oil is actually seeping to the surface, Hicks said finding and harnessing the oil can often be a costly, tricky enterprise.
“We know reservoirs have developed below the sub-surface here. It’s just a matter of putting the straw into the right cup,” Hicks said Thursday. “So when they drill in western Newfoundland and the results say they didn’t find anything, don’t think there’s nothing there. That’s not the case at all. It could be that they didn’t put the drill in the right spot.”
Currently, there are seven onshore permits in the western region for petroleum exploration. In the Flat Bay and Robinsons area for example, the Investcan Energy Corporation is planning a four-well pilot project this year to test oil flow rates, while Nalcor Energy has been drilling two wells in Parsons Pond and have found what Hicks describes as “loads of gas” and are evaluating what to do next.
In Port au Port, Shoal Point Energy started drilling over a year ago and are having issues with the tight rocks in the region which have little porosity and permeability. Meanwhile at Shoal Point, another company is hoping to achieve commercial oil production of as much as 200 barrels of oil per day.
With so many possibilities as play, Hicks was asked about the likelihood for commercial oil production in the region within the next 15 years. In addition to the luck required to place a drill in the exact spot to hit oil, he pointed to the current market conditions as a major challenge facing the industry.
“A couple a years back everything was in the upswing but now it seems to be going down again,” he said. “So the exploration dollars are drying up and it’s been hard for companies to raise money to do much exploration.”
Hicks said the provincial government is currently supporting 22 projects as part of the $5 million Petroleum Exploration Enhancement Fund, one which is gathering geoscience information which companies can access as part of their exploration efforts. When combined with a $200-million offshore fund, Hicks is hopeful companies will have enough data at their disposal to make for cheaper, less risky projects in the near future.
“Once we get that data … we will have a very detailed data set for offshore and onshore western Newfoundland which explorationists can use to decrease the risk to do more exploration,” he said.